Lowe makes penultimate RBA rate call

Reserve Bank of Australia RBA interest rates inflation

1 August 2023
| By Laura Dew |
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The RBA has held rates at 4.1 per cent, its second consecutive month of pauses.

Rates were also held in July as it wanted time to assess the impact of interest rate hikes that have already been made.

This is the penultimate rate decision for RBA governor, Phil Lowe, after it was announced last month that he will depart in mid-September and be replaced by Michele Bullock.

Lowe said: "The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month. This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook.

CPI inflation slowed in the June 2023 quarter with a rise of 0.8 per cent which is the lowest quarterly rise since September 2021 and by 6 per cent annually, according to the Australian Bureau of Statistics (ABS). The central bank is targeting inflation of 2-3 per cent. 

The most significant contributors to the rise in the June quarter were rents (+2.5 per cent), international holiday travel and accommodation (+6.2 per cent), other financial services (+2.5 per cent) and new dwellings purchased by owner-occupiers (+1 per cent). 

Another change will be the reduction in the number of meetings from 2024 when the number of meetings will reduce to eight per year, following an independent review of the central bank.

Meetings will take place in February, May, August and November with the remainder in between those months. 

“The less frequent and longer meetings will provide more time for the board to examine issues in detail and to have deeper discussions on monetary policy strategy, alternative policy options and risks, as well as on communication. Likewise, the staff will have more time for analysis, with less time spent preparing summaries of recent developments. The board will also be able to hear directly from more staff and have greater opportunity to request work on particular topics.”

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Submitted by Simon on Tue, 2023-08-01 16:10

Goodbye Lowe! Can’t say you will be missed!! Your legacy - an absolute Masterclass in incompetence..!

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